In a briefing for the Zillow Research blog, Jeff Tucker presents further evidence.

He starts with the (American) context:

“The U.S. baby bust started at the onset of the Great Recession in 2008, when the total fertility rate began falling. It dropped from a high of 2.12 per woman in 2007 to 1.93 by 2010.

“Most observers expected that fertility would rebound as the economy recovered, but instead the fertility rate has continued falling. In 2016, the most recent year with detailed birth records, the total fertility rate was down to 1.82, and preliminary data show it dropped to 1.76 in 2017.”

Might this have anything to do with house prices? Tucker takes a look at the data:

“If rising home values contributed to fewer babies being born, we would expect to see that birth rates fell more in places where home values rose more. Birth records from the CDC’s National Center for Health Statistics show that this is, in fact, what happened: There was a strong negative relationship between home value growth and birth rate change across large counties in the U.S. for 25- to 29-year-old women, from 2010 to 2016”

25-to-29-year-olds, by the way, are the age group “most likely to consider having a baby but not already own a home”. Anyway, here’s the key finding:

“Counties with the largest home value increases had exceptionally large drops in fertility”

That would appear to be pretty conclusive, but there are some complications. For one thing, the average figures conceal a great deal of regional variation. The link between rising house prices and falling birthrates is much stronger in some parts of the country (especially “urban counties in the West and North East”) than others (especially the South and South West).

In the American Sun Belt, property is generally more affordable than in the big coastal cities – and a price rise from a lower base is going to be less of a hurdle than one from a higher base. Indeed, in a ‘cheap’ property market, appreciating house values may help create a sense of confidence that an area is ‘up-and-coming’ – always nice to know when if you’re planning to raise your kids there. However, in a property hotspot, further price rises may look like a crash waiting to happen. The last thing new parents need is to buy at the top of an overheating market.

For all of these reasons, we shouldn’t expect property price rises, even if uniform in percentage terms, to have the same impact on birthrates in different parts of the country.

Tucker also points out that whether the link between increasing house prices and decreasing birthrates is strong or not, we cannot assume the causal direction:

“One alternative explanation could be the possibility that there is clustering into certain counties of people with careers that pay well enough for expensive homes but make it difficult to have children before 30.”

This may well be part of the explanation – and, in the long-term, it might not make too big difference to population dynamics if childbirth is merely being delayed. However, the author notes that the latest figures show birthrates down for women in their thirties too.

That might reflect the fact that, as in the UK, American 30-somethings are less likely to be home owners than previous cohorts. (The average age of the American first-time buyer now stands at 35.2, which is up from the 2010 to 2013 figure of 32.5.)

Clearly, more evidence is needed to understand the precise balance of causal factors. But one thing is for sure: things won’t end well for a society that can’t afford the space nor the time for children.